Arbitratory and Capricious Standard of Review under ERISA

In Te’O v. Morgan Stanley & Co., 2009 U.S. App. LEXIS 2770 (10th Cir. Feb. 11, 2009), the Tenth Circuit Court of Appeals articulated the standard of review for a third-party administrator who, under the plan, has discretion to determine eligibility for benefits.  A decision to deny benefits is reviewed under the arbitrary and capricious standand.  Applying this standard, a court will consider only the arguments and evidence presented to the third-party administrator at the time the decision was made and whether substantial evidence supported that decision.  The decision does not need to be the only logical one or even the best decision.  It need only be sufficiently supported by facts within the third-party administrator's knowledge to counter a claim that the decision was arbitrary and capricious.  The decision will be upheld unless it is not grounded on any reasonable basis. 

10th Circuit Standard for Award of ERISA Attorneys Fees

In order to obtain attorneys' fees in the Tenth Circuit Court of Appeals under ERISA, 29 U.S.C. § 1132(g), a claim must have substantial merit or be one of great public importance.  Te’O v. Morgan Stanley & Co., 2009 U.S. App. LEXIS 2770 (10th Cir. Feb. 11, 2009).

Where No QDRO Exists, Plan Administrator Should Follow Plan For Distribution of Benefits

The United States Supreme Court held in Kennedy v. Plan Administrator for Dupont Savings & Investment Plan, No. 07-636 (Jan. 26, 2009), that the plan administrator correctly relied on the plan language to determine that the deceased plan participant's former spouse was entitled to the plan benefits even though the spouse disclaimed the right to the benefits in her divorce decree but did not have a QDRO.